Atlas Engineered Products: Manufacturing Automation & Plant Economics

This is a snippet of the transcript, sign up to read more.

During your three years, what changes did you make, either culturally or organizationally, to professionalize the business? Any concrete examples would be helpful.

The biggest thing I did at the time was starting the journey towards automation. Each of these plants, when acquired, came in at different levels of automation. Some operations were extremely manual, still using tape measures and hand tools. We upgraded to equipment that could automatically measure bolts, etc. We also brought in technology to diversify the product range from roof trusses to include prefabricated walls and wall structures for the housing industry. So, instead of only supplying roof trusses, they now supply wall panels, etc., for modular building construction.

This is a snippet of the transcript, sign up to read more.

I'm looking at pre-Covid. I understand there was a lot of lumber craziness in 2021 and whatnot, but this was 2019. Right. So just going from 2018 to 2019, it looked like a big jump in revenue.

I can tell you categorically that one of the reasons for that was primarily organic growth as a result of increasing capacities in the facilities, a focus on multi-territory sales and marketing, and focusing on larger construction companies. A lot of the truss industry is absolutely scattered, that's probably the right word. You have literally across Canada, hundreds of truss manufacturing plants. Most of the owners are heading into retirement. Their kids are doctors or lawyers or whatever the case might be, so there are no succession opportunities for them. It makes it very ripe for Atlas to do a lot of consolidation in that industry. But the growth didn't come from the merger and acquisition front only. The biggest portion of that growth came from being part of a larger national footprint. The same contractors building in Toronto, Windsor, and London can now buy from the same group, allowing for multi-territory penetration which didn't exist before.

This is a snippet of the transcript, sign up to read more.

What kind of returns on capital would that translate into?

Again, it depends on the capital investment. For example, if I think about Pacer, they were doing about $15 million and delivering about 20 points, they would have done about $2.5 million to $3 million worth of EBITDA. The capital on that plant at the time was about $1.9 million or $2 million worth of capital. So you could do the calculation.

This is a snippet of the transcript, sign up to read more.